is Softbank as beneficial to the economy as it is hyped up to be?????

[socrates469bc]

interesting article on softbank, its nonsensical investment philosophy and its impact on the contractors.

 

at this rate, i wouldnt be surprised if softbank collapse under the weight of theses nonsensical investments.

 

thats why i was and never a believer in the grab/uber biz

 

The SoftBank Effect: How $100 Billion Left Workers in a Hole

SoftBank poured money into start-ups that use armies of contractors. That has upended the lives of drivers, hotel operators and real estate agents around the world.

 

By Nathaniel Popper, Vindu Goel and Arjun Harindranath

• Nov. 12, 201
•  

• • By Nathaniel Popper, Vindu Goel and Arjun Harindranath

    • Nov. 12, 2019
    • •  

    For five years, Sunil Solankey, a retired captain in the Indian Army, had run the 20-room Four Sight Hotel in a New Delhi suburb. Business was steady, but he longed to make the establishment a destination for lucrative business travelers.

    Last year, a hospitality start-up called Oyo told Mr. Solankey that it would turn the Four Sight into a flagship hotel for corporate customers. It guaranteed him monthly payments whether the rooms were booked or not, as long as he rebranded the property with Oyo’s name and sold the rooms exclusively through its site.

    At Oyo’s request, Mr. Solankey sank 600,000 rupees, or $8,400, into reupholstering the hotel’s furniture and adding new linens. But corporate guests did not materialize, and Oyo stopped making the payments. Now he is on the verge of eviction.

    Mr. Solankey is one of millions of workers and small-business people who worked with start-ups financed by the biggest venture capital fund in history, the $100 billion Vision Fund run by the Japanese conglomerate SoftBank. The fund was part of a flood of money that has washed over the world in the past decade — and that has upended people’s lives when the start-ups broke their promises.

  • .........................
  • https://www.nytimes.com/2019/11/12/technology/softbank-startups.html
  •  

[The_King]

anothert start up

[Homelander]

Apparently they are still surviving...like a private glc 

[socrates469bc]

1 hour ago, Homelander said:

Apparently they are still surviving...like a private glc 

 

softbank is lucky to have bought a stake in alibaba during its early yrs and managed to market yahoo japan into the country's dominant search engine, then came along softbank corp.

 

these 3 investments form the cash cow of the company. if not, softbank would most likely have collapsed within a yr based on how son-san burn money.

 

son-san is also very smart to have mostly use other investors' money to buy all those nonsensical start-ups via his vision fund where uber/grab/oyo/slack r parked under.

 

accounting wise, becos softbank mother only own ard a 20% stake in vision fund, all those nonsensical investments will not appear in the consolidated accounts and be written off in the vision fund account.

 

in other words, his softbank mother will be ringfenced against bankruptcy to a certain extent while vision fund investors will be left holding the majority of any writeoffs.

 

just goes to show there r no lack of 'intelligent' kgks in the world.

Edited November 22, 2019 by socrates469bc

[aaur4man]

I was wondering how come SoftBank got so much money

[Homelander]

58 minutes ago, socrates469bc said:

 

softbank is lucky to have bought a stake in alibaba during its early yrs and managed to market yahoo japan into the country's dominant search engine, then came along softbank corp.

 

these 3 investments form the cash cow of the company. if not, softbank would most likely have collapsed within a yr based on how son-san burn money.

 

son-san is also very smart to have mostly use other investors' money to buy all those nonsensical start-ups via his vision fund where uber/grab/oyo/slack r parked under.

 

accounting wise, becos softbank mother only own ard a 20% stake in vision fund, all those nonsensical investments will not appear in the consolidated accounts and be written off in the vision fund account.

 

in other words, his softbank mother will be ringfenced against bankruptcy to a certain extent while vision fund investors will be left holding the majority of any writeoffs.

 

just goes to show there r no lack of 'intelligent' kgks in the world.

 

I feel like their approach is anyhow bet...see which one can be next alibaba...u give clarity the exposure is at best 20++% for main Softie...still quite pain if toh

[meng.huat]

privatizing the profits

publicizing the loss

[socrates469bc]

3 hours ago, aaur4man said:

I was wondering how come SoftBank got so much money

 

softbank made the lucky investment into alibaba's early yrs and then yahoo japan, but both initial investments totaled ard usd50m or so.

 

then the valuations of both investments shot up in the past 20 yrs and the nippon banks lent son-san the money implicitly based on those stakes.

 

add in the ultra-low nippon rates, softbank managed to finance their buyouts of  strategically important arm, nvidia and profitable softbank corp. 

 

if u look at softbank's accounts, u will find that those money-losing ventures like uber/grab/we work etc r parked under his vision fund while the profitable ones like softbank corp r parked in his softbank mother holding.

 

so essentially, son-san is gambling mostly with other people's money and not his own.

[socrates469bc]

3 hours ago, Homelander said:

 

I feel like their approach is anyhow bet...see which one can be next alibaba...u give clarity the exposure is at best 20++% for main Softie...still quite pain if toh

 

ur feel is correct.

 

i didnt buy into his midas hype of buying into uber/grab/oyo in the very beginning becos i find uber/grab/we work to have low barriers to entry but high costs to attain mass of scale via contractor subsidies, therefore, the biz may collapse either b4 it reaches profitability due to the heavy subsidies or the loss of contractors once subsidies r withdrawn. 

 

and after i heard his investment philosophy during a talk in taiwan, he is confirmed to be playing tikam with the vision fund's money.

 

if want to convince other 'intelligent' kgks to join in ur bandwagon, of cos must do a bit of investment to con them in.

 

the cash generating assets of softbank mother will cushion any usd20bln writedowns over the 5-10 yrs. at most threaten to sell arm to tiongland and we can see the americans coming to son-san's rescue.